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Buffett, Soros Join List of Billionaires Calling for Tax Hikes They Won’t Pay

Matt Nesto

Since Warren Buffett has once again entered the current debate over tax increases by calling for the federal estate tax to go up, it only seems fair to see how his latest round of proposed changes would actually impact him. Buffett is among America's super rich, and his fortune, at $46 billion, is second only to Microsoft founder Bill Gates'.

Prior to his latest call for the upward revision of the estate tax, the Berkshire Hathaway Chairman has also recently called for income, capital gains and dividend taxes to go up too, explaining in a widely discussed op-ed in The New York Times ("A Minimum Tax For The Wealthy") that higher tax rates over the years have had no bearing on investors like him.

As much as this may sound like selfless advice from a renowned financier who simply wants what's best for America, in reality he's immune from almost all of it. As I discuss with Aaron Brown, Risk Manager at AQR, in the attached video, Buffett's do-as-I-say, not-as-I-do proposals seem to fit the criteria needed to be a patriotic millionaire.

"I just got fed up. It wasn't just Warren Buffett. There's been a half dozen of these things lately, and what I noticed is everyone is asking for taxes to be raised except the taxes they actually pay," Brown told me on the sidelines of the Minyanville Festivus event.

So in that light, let's look at the gap that exists between proposed tax hikes and actual impact.

  • The proposed income tax increase on couples earning more than $250,000 year: Buffett's $100,000 a year salary is well known - as is the complaint that his poor, lowly secretary has a higher tax rate.

  • Then, there's his support for the recommended adjustment to tax dividends and capital gains as ordinary income instead of at the current 15% rate: Berkshire doesn't pay a dividend and Buffett never sells stocks.

Don't get me wrong, I am all for trust and foundation philanthropy. In fact, I fear that this critical giving component of our society would suffer as a result of tax increases on "the rich." What irks me, and many others, is the flawed thinking that contends that these populist-inspired tax increases are the solution to all of our fiscal problems, when in fact they would barely make a dent in the deficit. And even then, these projected increases in tax revenues under different rate scenarios over a 10-year period would not only likely prove to be all wrong but also probably carry serious unintended consequences as well.

For more information on Minyanville's Festivus charity event benefiting The Ruby Peck Foundation please click here.